Modvat credit on refractory materials used in steel manufacture was upheld as eligible inputs for manufacturing process.

Modvat credit was held admissible on refractory bricks, refractory mortars and fibre bricks used in an electric arc furnace for manufacture of steel castings and steel ingots/billets. The Tribunal followed earlier decisions, including a Larger Bench ruling and a Calcutta High Court decision, which treated such refractory materials as inputs used in the manufacturing process. On that basis, the denial of credit by the lower authorities was found unsustainable, and the materials were accepted as eligible inputs for Modvat purposes.

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Issues: Whether Modvat credit was admissible on refractory bricks, refractory mortars and fibre bricks used in the electric arc furnace as inputs in the manufacture of steel castings and steel ingots/billets.

Analysis: The Tribunal noted that the question had already been considered in earlier decisions, including the Larger Bench ruling and the Calcutta High Court decision, which treated such refractory materials as eligible inputs for Modvat credit when used in the manufacturing process. The Tribunal followed those decisions and held that the denial of credit by the lower authorities was not sustainable.

Conclusion: Modvat credit was admissible on refractory bricks, refractory mortars and fire bricks.

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